UN report: Broadband has huge impact in PH

A comprehensive report undertaken by the International Telecommunications Union (ITU), an agency of the United Nations, has found that the massive growth of the country’s broadband infrastructure over the last decade has profoundly impacted the Philippine economy.

The study, the first to be conducted by the ITU for a series of broadband reports on selected countries around the world, was released during the second day of the World Summit on the Information Society (WSIS) currently being held in Geneva, Switzerland.

The Philippines has been studied for the impact of fixed and mobile broadband adoption on its economy, the report noted.

In the case study, analysis over the 10-year period indicated that mobile broadband adoption in the country has contributed an annual 0.32 percent to GDP (gross domestic product), representing 6.9 percent of total GDP growth for the economy over the past decade.

“Given the acceleration of mobile broadband penetration since 2005, this impact has also now almost doubled, reaching 0.61 percent of GDP, representing 7.3 percent of total economic growth over the decade,” the report said.

The study noted that during 2000-2010, the fixed broadband market in Philippines was relatively thin and was not found to affect the wider economy. Nevertheless, the more dynamic and popular sector of mobile broadband was estimated to contribute an annual 0.32 percent to GDP during the past decade.

“This represents 6.9 percent of all GDP growth for the economy, given that GDP grew annually at 4.6 percent. Since 2005, this impact almost doubled reaching 0.61 percent of GDP, thus accounting for 7.3 percent of all economic growth in the country,” the report added.

The ITU report credited the private telcos in addressing the country’s rudimentary fixed line infrastructure through wireless price reductions and wide coverage. This has resulted in a fast adoption process, it noted.

“Across different regional and socio-economic contexts, the direct and indirect economic impact of network infrastructures is found to be persistently strong,” the report said.

The study said future challenges should focus on applying the lessons from wireless and combining mobile with fixed infrastructure in an optimal way to accelerate fixed broadband adoption.

“In parallel, the development of applications in education, public health, media and entertainment and government services, would act as incentives to further increase broadband adoption,” it said.

Mobile networks, the report said, can be deployed quickly to provide basic voice communications to a population often uncovered by fixed networks. In developing economies the attribute of mobility is enhanced by widespread network availability and more demanding lifestyle characteristics, it added.

“Network effects seem to become stronger as more people decide to subscribe giving support to the increasing returns to scale hypothesis: more access to the networks multiplies their effect on the economy,” the report concluded.

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